The eight-year-old fund, with $80 million in assets under management, has invested in 17 companies. Nine companies in its portfolio either cater to Indian market or are India-based.

The eight-year-old fund, with $80 million in assets under management, has invested in 17 companies. Nine companies in its portfolio either cater to Indian market or are India-based.

BANGALORE: Gray Ghost Ventures, a global social venture fund, said it is in the middle of raising its third fund of $60 million (Rs 361 crore), and expects to invest in three companies this year after closing the round in June.

The eight-year-old fund, with $80 million in assets under management, has invested in 17 companies. Nine companies in its portfolio either cater to Indian market or are India-based. Blue collar job portal Babajob, text-based healthcare information provider mDhil, and US-based Promethean Power Systems, which help keep milk in rural India refrigerated through thermal batteries, are a few examples.

“The existing investors are very happy. Most of them have come on board for the new round,” said Arun Gore, president and CEO of Gray Ghost Ventures, who was part of the executive team at wireless network operator T-Mobile USA for over a decade.

Gray Ghost’s new fund will look at investing in companies that leverage the mobile platform, mostly for financial services. Companies in South Asia will get 70% funding and the rest will go to sub-Saharan Africa. The fund has shortlisted six out of 180 applicants for funding in 2014.

“These are like any other VC fund. Everybody has to raise money and give back to their investors,” said Vineet Rai, founder of Aavishkar, a social venture capital firm, whose fund has more than $160 million assets under management.

The fund has made 50 investments last year, and has had nine exits till date. Gray Ghost’s investing team include Brian Cayce, a former business valuations consultant at KPMG, and Bahniman Hazarika, who formerly worked at Viscogliosi Brothers, a New York based private equity firm.

Gore of Gray Ghost said the fund has been tracking an internal rate of return (IRR) of 30% and has had two exits till date, including Cell Bazaar, which was sold to Norway-based communications major Telenor Group. IRR is the rate of growth a project is expected to generate.

“Typically social ventures get at least a 2x exit,” said Gore. “Profitability and social impact are equally important, and I am unabashed about saying that. A business will have impact only when it has a successful model in place.”

According to a report by Unitus Capital, impact investment in India comprised 23% of the overall private equity transactions in India in 2013. About 80 deals totaling $390 million were from the sector.

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